Anand Rathi is bullish on IPCA Labs has recommended buy rating on the stock with a target price of Rs 2300 in its research report dated August 12, 2020.
Anand Rathi 's research report on IPCA Labs
Ipca’s Q1 FY21 result was boosted by strong momentum in its of business and supplies of Covid’19-related drugs (sales of `2.6-3bn). Sales grew 42.3% y/y to `15.3bn. Gross and EBITDA margins were a record 71.9%/38%, expanding 952/2037bps on one-time supplies of drugs with lofty margins and higher operating leverage. Adj. PAT grew a stunning 259% to `4.4bn. We increase our FY21e/22e/23e 28.6%/12.8%/14.1%.
Strong traction in India formulations and exports and investment in raising API capacity and backward integration are likely to boost earnings 26.5% over FY20-23. We retain our Buy rating on the stock, with a higher target of `2,300.
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